Asset finance: hire purchase, leasing and refinancing for UK businesses

There is no single best asset finance lender in the UK: the right one depends on the asset, its age, your trading history and credit. Smart Funding Solutions, a whole-of-market commercial finance broker, compares high street banks, specialist asset finance companies and lenders that focus on soft assets, used kit or weaker credit, then approaches those most likely to approve your case.

Asset finance lenders differ far more by appetite than by brand. A lender that prices a new van keenly may not touch a ten year old excavator, and a lender happy with software may decline a start-up. These are the main kinds of lender we search across, with our own lender reviews where we have them:

• Bank-owned asset finance: lower pricing for established, profitable businesses buying new or nearly new hard assets. Examples on our site include Lombard (part of NatWest Group), Close Brothers, Aldermore and Metro Bank Asset Finance.
• Specialist and independent asset finance companies: more flexible on used equipment, refinance and sector-specific kit. See Novuna, Time Finance, Davenham Asset Finance and Haydock Finance.
• Soft asset and technology lessors: IT, software, fit-outs and smaller tickets. See Armada Asset Finance, Black Arrow Finance and PEAC Solutions.
• Agricultural and niche specialists: farm machinery, prestige cars, marine and aviation, such as Alchemy Business Finance and JBR Capital.

Each review covers what that lender funds; the full list is on our lender reviews page. We do not rank lenders, because the best offer depends on your case.

How to choose an asset finance lender

• The asset: hard assets with a resale market (vans, HGVs, plant, machinery) attract more lenders than soft assets. See vehicle and fleet finance and plant finance.
• New or used: some lenders cap the asset's age at the end of the term. See used equipment finance.
• Structure: hire purchase, a finance lease or an operating lease suit different tax and ownership needs.
• Your profile: trading history, credit record and deposit. Newer businesses or those with adverse credit should read bad credit asset finance.
• Total cost: compare the total repayable, fees, any balloon and the option to purchase fee, not just the monthly payment.

Some asset finance is available under the British Business Bank's Growth Guarantee Scheme from £1,000, through accredited lenders. To see which lenders fit your asset and business, use Instant Quotes; there is no credit check to see your matches.

• General equipment such as tools, IT, catering or medical kit: equipment finance.
• Production and plant such as CNC machines, presses, production lines and heavy plant: machinery finance.
• Cars, vans and fleets: van finance, electric car business finance, or our guide to business vehicle finance.
• Software, IT systems and fit-outs with little resale value: soft asset finance.
• Buying an asset to own over time: business hire purchase; or, if you want use without ownership, a finance lease.
• Cash from assets you already own: asset refinance.
• A weaker credit history: our guide to bad credit asset finance.

Hard assets are tangible items with a resale value, such as vehicles, machinery, plant and agricultural equipment. They are the most straightforward to finance because the lender can recover value if needed.

Soft assets have little resale value, such as software, IT systems, security equipment, fixtures and fittings. They can still be financed, but lenders look more closely at the strength of your business because the asset offers less security.

• Construction: excavators, telehandlers, dumpers and vans, so larger jobs do not drain cash needed for materials and wages.
• Agriculture: tractors, combines and handlers, sometimes with repayments matched to harvest income.
• Manufacturing and engineering: CNC machines, robotics and production lines that last many years.
• Transport and logistics: HGVs, trailers, vans and forklifts, often grouped into one facility with planned replacement cycles.
• Healthcare: dental chairs, imaging and diagnostic equipment for practices.
• Hospitality and retail: commercial kitchens, refrigeration, coffee machines, EPOS and fit-outs.

Asset finance also reaches specialist sectors such as aviation, where flight schools, charter operators and survey firms use aircraft finance in the UK, including hire purchase, aircraft mortgages and leasing, to fund aircraft, helicopters and drones.

Gyms and studios fund cardio machines, strength racks and fit-outs the same way, often alongside an unsecured loan for marketing and staff; see business loans for gyms.

Vessels are a specialist corner of asset finance. Our page on commercial fishing boat finance explains how marine lenders use a registered mortgage, a survey and landings records.

Limited companies, partnerships and sole traders can all apply, although sole traders may find fewer lenders and may need a strong personal credit record. Finance of £25,000 or less to sole traders and small partnerships can be regulated consumer credit.

The asset you are financing is normally the main security, so most asset finance needs no property charge. With hire purchase the lender owns the asset until the final payment; with a lease it stays in the lender's ownership throughout, which is why it can repossess if payments stop.

Lenders often ask limited company directors for a personal guarantee, particularly where the business is young, the asset is soft or specialist, or the amount is large relative to turnover. A bigger deposit, a shorter term or a strong trading record can reduce or remove that requirement. For larger facilities a lender may also want a debenture. Read our guide to personal guarantees before you sign one.

The main alternatives are a general business loan, a wider asset-based facility or simply paying cash. An unsecured business loan can fund kit and installation together, but lenders price it on the business rather than the asset. Asset-based lending combines plant, stock and receivables into one revolving facility, which suits larger businesses with several asset classes. A secured business loan against property may offer a longer term for a big project. If cash is plentiful, buying outright avoids interest, though it ties up working capital. Our guide to hire purchase vs leasing compares the two most common agreements.

With hire purchase, your business is normally treated as owning the asset and may be able to claim capital allowances. With leasing, rental payments are often treated as a business expense. The rules are detailed, so check the right treatment with your accountant and see HMRC's guidance on capital allowances.

An asset finance broker does not lend. We take the details of the asset, the supplier and your business, work out which lenders on our panel fund that kind of asset for a business like yours, and present the case to them. Then we compare the offers with you on the total amount payable, not just the monthly figure.

It matters because asset finance lenders differ more than most. They set their own limits on the age of the asset, the trading history they need, whether they fund private sales and whether they take soft assets such as software at all. A machine one lender declines can be routine for another.

• What we do: match the asset and your business to lenders with appetite for both, prepare the case and handle the questions.
• What we do not do: lend, or tell you a lender has approved before it has.
• What it costs: fees depend on the lender, nothing upfront, and any broker fee is disclosed before you proceed.
• How to check us: any broker arranging finance should be on the FCA Register.

Every page in our asset finance section, grouped by what you are funding.

• Agreements and ways to pay: Asset refinance.
• Vehicles: Van finance.
• Plant, machinery and buildings: Machinery finance.
• Equipment, technology and energy: Equipment finance.
• Guides: Bad credit asset finance, Soft asset finance.
• More asset finance: Equipment finance, Machinery finance.